12 Fla. L. Weekly Supp. 919b
Insurance — Personal injury protection — Application — Misrepresentations — In granting insured’s motion for partial summary judgment as to insurer’s material misrepresentation defense, based on insurer’s alleged failure to return unearned premium, trial court erred in relying on section 627.7282, which applies when insurer cancels policy because incorrect premium has been charged — Case law holding that refunds of premiums must be made to insured rather than premium finance company is applicable only where refund is due to incorrect premium, not misrepresentation — Waiver — Whether insurer intended to waive right to rescind policy by failing to return premium in timely manner is question of fact that should have precluded summary judgment — No merit to argument that notice of cancellation is ineffective because it was not mailed at least 45 days prior to effective date of cancellation — Statutory provision requiring notice is not applicable when insurer rescinds policy for misrepresentation in application — No merit to claim that cancellation of policy can only be prospective, not retrospective, because material misrepresentation renders policy null and void from date of inception — Even if notice requirement applied and insurer failed to comply, insurer is not precluded from defending on grounds of misrepresentation — Insurer does not become liable on claim because it failed to return premiums within applicable period and without interest due — Only penalty imposed for untimely refund is statutory interest
UNITED AUTOMOBILE INSURANCE COMPANY, a Florida Corporation, Appellant, v. MARIA QUIROGA, Appellee. Circuit Court, 11th Judicial Circuit (Appellate) in and for Miami-Dade County. Case No. 04-143 AP. L.C. Case No. 2000009673 CC 25. July 19, 2005. An Appeal from the County Court for Miami-Dade County, Wendell M. Graham, Judge. Counsel: Paula B. Tarr, for Appellant. Dennis D. Bailey, for Appellee.
(Before ESQUIROZ, MUIR and FREEMAN, JJ.)
(PER CURIAM.) On May 17, 2000, Maria Quiroga (“Appellee/Quiroga”) sustained physical injuries in an automobile accident, for which she received medical treatment. Subsequently, she made a claim for personal injury protection (PIP) insurance benefits under a policy issued to her husband, Juan C. Martinez, by United Auto (“Appellant/United Auto”). Appellant denied payment of the claim after it discovered that Appellee’s husband failed to list on the policy application that Appellee had a restricted driver’s license. Consequently, on September 27, 2000, Appellant issued a notice of cancellation advising Appellee’s husband, the insured in this case, that the cancellation was due to the material misrepresentation and said cancellation was effective of January 4, 2000.
On October 25, 2004, Appellee filed a complaint for personal injury protection insurance benefits. Appellant answered and asserted as an affirmative defense that Appellee’s husband had misrepresented information in the insurance application, that if known by Appellant would have caused Appellant not to issue the policy or to issue it under a different premium. On December 31, 2003, Appellee filed a motion for partial summary judgment. In support of her motion, she argued that Appellant failed to return the unearned premium as required by Florida Statute §627.7282(1)(c) and that Appellant failed to effectively rescind and cancel said policy by returning all premium paid within a reasonable time, a condition precedent under the material misrepresentation defense. Without any specific findings of law or fact, the trial court entered an order granting Appellee’s motion on February 6, 2004.
Consequently, Appellant filed a Motion for Rehearing and/or Reconsideration of Order Granting Plaintiff’s Motion for Partial Summary Judgment as to Defendant’s Material Misrepresentation Defense. In support of its motion, Appellant argued that the trial court improperly granted Appellee’s motion relying on section 627.7282, Fla. Stat., (2004) as Appellant’s right to rescind a policy based on material misrepresentation is governed by § 627.409, Fla. Stat., (2004). On February 17, 2004, the trial court denied Appellant’s motion and the case proceeded to trial on the remaining issues, where Appellee prevailed. Appellant filed this appeal challenging the trial court granting of Appellee’s motion for partial summary judgment.
Summary judgment is proper where there are no genuine issues of material fact and where the moving party is entitled to a judgment as a matter of law. Volusia County v. Averdeen at Ormond Beach, L.P., 760 So. 2d 126, 130 (Fla. 2000). The standard of review for a summary judgment order is de novo and requires viewing the evidence in the light most favorable to the non-moving party. Sierra v. Shevin, 767 So. 2d 524, 525 (Fla. 3d DCA 2000). It is well settled that the moving party has the initial burden of demonstrating the nonexistence of a genuine issue of material fact. Ramos v. Wright Superior Inc., 610 So. 2d 46, 48 (Fla. 3d DCA 1992). If the slightest doubt exists, summary judgment must be reversed. Sierra, 767 So. 2d at 525. Thus, summary judgment may only be granted if the pleadings, depositions, answers to interrogatories, and admissions on file together with affidavits, if any, show that there is no genuine issue as to any material fact, and that the moving party is entitled to judgment as a matter of law. Fla. R. Civ. P. 1.510(c).
The trial court improperly granted Appellee’s motion for a partial summary judgment. In granting the partial summary judgment, the trial court improperly relied on the statutory provisions found in §§ 627.728-627.7282, Fla. Stat., (2004). The correct statutory provision here is § 627.4091, which gives Appellant the right to rescind a policy based on material representations. See Nationwide Mutual Fire Insurance Company v. Kramer, 725 So. 2d 1141, 1142 (Fla. 2nd DCA 1999).
In the present case, the record reveals that, Appellant wrote to the insured, the Appellee’s husband, on September 27, 2000, after concluding that there had been a misrepresentation on the policy application. Appellant found the fact that Appellee’s husband failed to list on the policy application that Appellee had a restricted license a material misrepresentation. The record also shows that Appellant submitted the affidavit of underwriter Jorge De La O, averring that if Appellant had known that Appellee had a restricted license it would have not issued the policy or would have charged an additional premium of $112.00. The underwriter also stated that due to the material misrepresentation, Appellant cancelled the policy and refunded the premium.
Nevertheless, Appellee contends that Appellant failed to effectively rescind and cancel the policy by not returning all the premium payments directly to the insured within a reasonable time, which was a condition precedent for the material misrepresentation defense. In support of its contention, Appellee relies on § 627.7282, Fla. Stat. (2004) and Bankers Ins. Co. v. General No-Fault Ins. Co., 814 So. 2d 1119 (Fla. 4th DCA 2002). Clearly, Appellee’s reliance on § 627.7282, Fla. Stat., (2004) and the Bankers’ opinion is misplaced. The issue here is not an incorrect premium charge, but a material misrepresentation which might render the policy null and void.
By its own terms section 627.7282, Fla. Stat., (2004) applies to situations where an insurer has cancelled a policy upon determining after review of the coverage that an additional premium is due because an incorrect premium has been charged to the insured. Furthermore, Bankers has been distinguished and the application of its holding limited by the Second District Court of Appeal in Amstar Ins Co. v. Cadet, 862 So. 2d 736 (Fla. 2nd DCA 2004). By rejecting the same argument made in the instant case, the court, in Amstar, clearly stated that the Bankers’ holding that the refunds of premiums must be made to insured rather than the premium finance company is applicable only if section 627.7282, Fla. Stat., (2004) applies. Id. at 738. Just as in Amstar, the issue in the instant case is not an incorrect premium charge.
Appellee also asserts that Appellant has waived the right to assert the defense of material misrepresentation because it did not effectively rescind the policy by failing to return the premium in a timely manner. Appellee erroneously relies on Leornardo v. State Farm Fire and Casualty Company, 675 So. 2d 176 (Fla. 4th DCA 1996) for this proposition. The Fourth District Court of Appeal in Leornardo held that whether insurer intended to waive right to rescind policy was a question of fact which precluded summary judgment. Id. 179. Accordingly, whether Appellant effectively rescinded the policy in this case was a question of fact that should have precluded the entry of summary judgment.
In the case at bar, the record reveals that Appellant delivered a check to the premium finance company in the amount of $443.17 for the unearned premiums. Subsequently, the finance company issued two checks one for $443.17 and a second one representing the agent’s commission for $113.83. Both checks were sent to Appellee’s husband, the insured. Thus, all premiums were returned although not in a timely manner.
Appellee also contends that Appellant’s notice of cancellation is ineffective because it was not mailed at least 45 days prior to the effective date of cancellation as prescribed by § 627.728(3)(a), Fla. Stat., (2004). Specifically, Appellee alleges that cancellation can only be prospective and not retrospective as Appellant attempted here. Appellee’s argument is untenable in the present case because § 627.728(3)(a), Fla. Stat., (2004) is inapplicable when the insurer rescinds a policy for the reason set forth in § 627.409, Fla. Stat. (2004). A material misrepresentation renders a policy null and void from the date of inception. Progressive American Insurance Company v. Papasodero, 587 So. 2d 500 (Fla. 2nd DCA 1991).
Even if the section did apply and Appellant did not comply with it, Appellant is not precluded from defending upon the grounds set forth in § 627.409, Fla. Stat., (2004). In Sauvageot v. Hanover Insurance Company, 308 So. 2d 583 (Fla. 2nd DCA 1975), the court stated that:
There is nothing in s. 627.08522, which contemplates methods of policy cancellation and hearings there on prior to claims being made, that indicates the legislature intended to preclude an insurer from defending a suit upon the policy on the statutory grounds prescribed in s 627.010813, which are applicable to all policies. Therefore, the court properly entertained a defense raised under that statute.
Id., at 585.
Further, Appellee claims that Appellant failed to return the unearned premium within the applicable period and thereafter the interest on the amount due as prescribed by the statutory section 627.7283(2) and (3)4, Fla. Stat., (2004). Appellant does not become liable on a claim because as the record reveals it failed to return the insurance premiums within the applicable period and without the interest due. See Diaz v. Florida Insurance Guaranty Association, Inc., 650 So. 2d 675 (Fla. 3rd DCA 1995) (The court held the insurance policy void ab initio and ordered the insurance company to return the premiums collected on the policy). The only penalty imposed on the insurer for not returning the premium on time is the statutory interest due. See § 627.7283, Fla. Stat., (2004). Therefore, Appellant in this case might be liable for the statutory interest due and not the claim.
Lastly, Appellee requests appellate attorney’s fees pursuant to Florida Statutes 627.736, 627.428, 59.46 and 57.105, as well as Rule 9.400 and 9.410, F.R. App. P. All the statutory provisions cited by Appellee afford Attorney’s fees to the prevailing party. Thus, the party prevailing at trial should be awarded attorney’s fees.
Based on the foregoing, we REVERSE the trial court’s order granting Appellee’s Motion for Partial Summary Judgments as to the material misrepresentation defense, VACATE the final judgment, and AWARD Appellate attorney’s fees if Appellant ultimately prevails on the merits of the case.
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1(1) Any statement or description made by or on behalf of an insured or annuitant in an application for an insurance policy or annuity contract, or in negotiations for a policy or contract, is a representation and is not a warranty. A misrepresentation, omission, concealment of fact, or incorrect statement may prevent recovery under the contract or policy only if any of the following apply:
(a) The misrepresentation, omission, concealment, or statement is fraudulent or is material either to the acceptance of the risk or to the hazard assumed by the insurer.
(b) If the true facts had been known to the insurer pursuant to a policy requirement or other requirement, the insurer in good faith would not have issued the policy or contract, would not have issued it at the same premium rate, would not have issued a policy or contract in as large an amount, or would not have provided coverage with respect to the hazard resulting in the loss.
(2) A breach or violation by the insured of any warranty, condition, or provision of any wet marine or transportation insurance policy, contract of insurance, endorsement, or application therefore does not void the policy or contract, or constitute a defense to a loss thereon, unless such breach or violation increased the hazard by any means within the control of the insured.
2This section now appears as § 627.728, Fla. Stat., (2004)
3This section now appears as § 627.409, Fla. Stat., (2004)
4F.S. 627.7283(2) “If an insurer cancels a policy of motor vehicle insurance, the insurer must mail the unearned premium portion of any premium within 15 days after the effective date of the policy cancellation.” F.S. 627.7283(3) “If the unearned premium is not mailed within the applicable period, the insurer must pay to the insured 8 percent interest on the amount due”
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